The European Union (EU) has warned that the cessation of Russian gas supplies to the bloc could potentially reduce Gross Domestic Product (GDP) by 1.5% if they fail to take precautionary measures to save energy by next winter.
According to a draft seen by the Financial Times, the European Commission now plans to tell EU members to reduce gas consumption immediately.
The European Commission is planning a set of recommendations to member states, including a reduction in the use of heating and cooling as well as a number of market -based measures.
The EU -coordinated response before the winter and an agreement between member states will limit the negative impact on GDP and employment from major disruptions by Russia.
The move comes after the International Energy Agency (IEA) warned that efforts to find alternatives other than Russian gas were insufficient and Europe would have to seize energy unless demand was limited to allow storage facilities to be filled by winter.
Over the past month, Russia has reduced the capacity of major pipelines to Germany and the IEA is worried about further cuts, saying Europe is now facing a ‘red alert’ and significant savings are needed to face the tough winter ahead.
Meanwhile, the Russian energy giant has declared force majeure on supplies and said it could not meet its supply obligations due to unforeseen circumstances.
This will further increase the pressure on Europe to prepare for the possibility of a reduction by Russia in the future.
